Perception and Policy: The Risks of Divisive Taxation in a Fragmented Society

By Ngembeni Wa Namaso*

The social impact of policy is undeniably crucial, particularly in societies with deep ethnic, social, or cultural divisions. In nations such as Cameroon, where perceptions of ethnic fragmentation are prominent, the formulation and implementation of policy can shape not only economic outcomes but also social cohesion and trust in government.

When policies, especially those related to fiscal measures, risk exacerbating existing divisions or creating new grievances, the consequences can be far-reaching, undermining both economic stability and social peace.

The Power of Perception

Perceptions are not mere beliefs or interpretations; they can become self-fulfilling prophecies that influence real-world behavior.
In societies where there is a widespread belief that government policies disproportionately favor one group over others, trust in institutions erodes.
This perception, in turn, can lead to a sense of injustice, fuel resentment, and drive a wedge between communities.

In Cameroon, the perception of an ethnically segmented society, where different ethnic conglomerates appear to dominate; one the political, and another, the economic landscape, poses a significant risk when public policy fails to address or acknowledges this fragmentation.

Fiscal Policy and Social Cohesion

Fiscal policy, which encompasses taxation, spending, and budgeting decisions, is not just an economic tool; it is a powerful political statement.

When fiscal policies are perceived to be inequitable or discriminatory, their impact extends beyond the economic sphere into the social fabric.

A tax policy that is perceived as disproportionately affecting some socio-economic segments can create a feeling of disenfranchisement among the affected communities, leading to increased tensions.

For Cameroon, where economic activity, particularly at the informal and small business levels, is perceived to be dominated by some ethnic groups while political power is seen as monopolized by another, the introduction of a taxation policy that raises taxes indiscriminately and targets even the minutest economic activity could deepen these rifts.

The Risk of Witch-Hunting Perceptions

When a policy, such as a 2025 Finance Bill, is adopted with tax increases that seem to disproportionately impact the business oriented communities or sectors, it may lead to the perception of witch-hunting, especially in an election year expected to be contentious.

This perception can be further intensified if there is a history of political or economic policies that have systematically favored some social classes, or groups over others. Witch-hunting implies that policies are insensitively designed not with the goal of achieving economic efficiency or fairness, but rather to single out and reap where Government did not sow, by disproportionately targeting some sectors, thereby putting a group perceived as an economic or political rival at a disadvantage.

In the case of Cameroon, if the taxation measures are viewed as intending to disrupt some groups at the expense of others, the result could be the deepening of social and economic divides.

Social and Economic Consequences of a Divided Society

Economic theories often assume that rational actors will respond to incentives and disincentives in predictable ways.

However, these theories do not account for the role of social cohesion and trust.

When public trust erodes, compliance with fiscal policy can weaken, leading to higher rates of tax evasion and a reliance on informal economic activities that are harder to regulate, or to corrupt methods of evading compliance.

Furthermore, economic activity becomes concentrated within certain groups, as businesses and individuals may relocate or adapt their behavior to avoid perceived discrimination.

This disruption can lead to a fragmented economy where certain communities thrive at the expense of others, undermining economic growth and productivity.

In addition to economic repercussions, the social consequences are profound.

A community that feels targeted by fiscal policies may become more politically active or engaged in opposition movements, increasing social polarization.

This dynamic can foster an environment where violence or conflict becomes more likely, which not only harms economic stability but also creates a cycle of insecurity that further erodes trust in public institutions.

The Broader Implications for Social Peace

The primary goal of policy should be to promote the well-being of the entire nation.
While rational economic theory supports the idea that revenue generation is necessary for funding public services, it must be balanced against the goal of fostering social peace and unity.

Policy choices that exacerbate divisions can create an environment where some communities feel as though they are being unfairly targeted, potentially igniting social unrest.

This becomes particularly dangerous when these policies reinforce historical and cultural narratives that one group is unfairly privileged or discriminated against.

Striking a Balance

To avoid the risks associated with creating divisive perceptions, policymakers must be proactive in ensuring that fiscal policies are seen as fair, transparent, and inclusive.

This involves engaging with communities and understanding their perspectives before implementing new measures.

Policies should be developed with an eye toward promoting economic growth while also addressing inequalities that might fuel resentment.

Measures that encourage economic inclusivity and distribute the burden of taxation equitably across various social groups help to foster a perception of fairness.

To this end, Cameroon's government must tread carefully when implementing the 2025 Finance Bill.

If a policy is perceived as targeting one group more than others or punishing one community unfairly, it risks creating or deepening existing social divides.

The result could be a failure of policy not just economically, but socially and politically, with long-term damage to the unity and stability of the nation.

In Conclusion

The social impact of policy, particularly in a society with deep ethnic and economic divisions, must not be underestimated.

When perceptions of unfairness or discrimination arise, they can undermine the very goals that policy is meant to achieve, including economic growth, social peace, and national unity.

In the case of Cameroon, where the perception of a divided society is already strong, any policy that seems to reinforce or exploit those divides can have significant repercussions.

Fiscal policy, if implemented without considering the social context and potential perceptions, can fail to meet the highest standards of acceptability, risking further fragmentation of the social fabric and setting the stage for increased conflict and instability.

*Ngembeni Wa Namaso is an Environmental Management Specialist and commentator on Society and Politics. He is based in Yaounde, Cameroon and holds a PhD in Forest Econmics and Management. The views expressed are his